AITX Completes Acquisition, Boosts Railcar Leasing Fleet

Written by Marybeth Luczak, Executive Editor
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The acquisition of certain railcar assets and operations formerly owned by SMBC Rail Services LLC has been completed by American Industrial Transport, Inc. (AITX), a railcar leasing and repair and maintenance provider affiliated with investment firm ITE Management L.P. (ITE).

St. Charles, Mo.-based AITX reported the acquisition in November and the closing on Dec. 14. With the acquisition, AITX said it “adds a diversified fleet of more than 50,000 railcars and welcomes new customers and new members to its expert rail industry team.” AITX and its affiliates now have a leasing portfolio of nearly 120,000 railcars.

Michael McCarthy has been appointed President of AITX. He spent the past 10 years building SMBC Rail Services—which was a member of Sumitomo Mitsui Financial Group (SMBC Group)—and running its commercial leasing and portfolio management business; he served most recently as CEO of that company. Previously, McCarthy held senior roles at GE Rail Services and GATX. Texas Howard has been named Chief Operating Officer of AITX, overseeing all U.S. and European fleet and repair operations, engineering, quality assurance, environmental health and safety, and human resources. For the past 15 months, he was President of SMBC Rail Services.

“I am incredibly excited to join and help lead the AITX team,” Michael McCarthy said. “It is a top organization with a focus on customer service, safety and quality. As supply chains continue to become more dynamic, we hear from freight shippers that they want trusted partnerships with full-service leaders, like AITX.”

“AITX’s focus is to work with our customers to meet and exceed their goals, via integrated scale and expertise across railcar leasing, logistics, repair services and business transparency,” Texas Howard said. “With these additions to our fleet, operations, and leadership team, we are further positioning AITX for greater success by leveraging skills and experiences of the combined teams.”

Deutsche Bank Securities Inc. served as lead financial advisor; Citi served as senior financial advisor; and JP Morgan, Goldman Sachs and RBC Capital Markets LLC also provided advisory services to ITE Management.

The acquisition financing is being led by Bank of America as administrative agent and supported by a group of arrangers and lenders, including Bank of America, Deutsche Bank, Goldman Sachs, Royal Bank of Canada, Sumitomo Mitsui Banking Corporation, and Citi, according to AITX. Willkie Farr & Gallagher LLP and Vedder Price LLP served as legal advisors to ITE Management.

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